Cost of Living Crisis – What do we do as landlords?

Reply to the comment left by Mike at 11/03/2022 - 00:41
I feel your pain Mike, and have decided to act. I had seven HMOs but am currently ecstatic that I have now sold three and have offers accepted on a further three. Time to move on to "armchair investing" as George Osborne called Buy-to-Lets in 2015 ( LOL!) It is all going to go into managed Investment funds, VCTs or Whisky Barrels (which can yield 11-15%...!!) they also never burn the house down, complain of mould, or call you at 07h00 to change a lightbulb, fill a bath with vomit, or need eviction costing £15,000 and taking twenty months... (A potted history of my tenants!!). With yields like that, why on earth are we in property at all I ask myself...??

Sadly at least four of the HMOs ( Currently housing around 30) will be changed back to family homes and sold on by the new owners, so where there were 30 homes, now there will be 4. Well done Mr Gove and current housing policy!!

I have two bills inclusive HMO's let on a room basis. All tenants are on a 12 month min AST and most only moved in recently. So for now, I have to just absorb the recent and anticipated further October energy increase. On the basis that this should be temporary, we have decided to absorb the increase ourselves. Rents will increase this time next year by CPI % that we anticipate will be significant.

Sadly, our hands are forced. Due to ever-increasing costs, buildings insurance, RGI (has rocketed since Covid), gas maintenance, EICR. Now interest rate rises and s24 in full force. It becomes economically untenable to leave our rents at a lower than marketable rate. Society expects us to just 'suck it up' and bear the further costs ourselves, while they rake in their s24 taxes and mortgagees make money from interest rate hikes. We cannot ask the taxman to just 'play fair' or our mortgagees to remove a couple of percent on our mortgage products as we're struggling. No, the ones left in this horrible industry have some tough decisions to make sooner than later regarding rent increases in the coming months. Sadly, there will be a lot of landlords (like me) who have had to 're-set' their tenancies with good long-term tenants in order to survive ourselves. It's tough, but it's a case of 'sink or swim', unfortunately.

Reply to the comment left by Mike at 11/03/2022 - 00:30
"My East European tenants want to..."
This is blatant racism. There is no room on this channel for this.

My apologies to you Neil T, or anyone else to cause unnecessary distress, actually I wanted to make a point but obviously I got it wrong, so my point was that these tenants are used to higher heat back home, they live in country side and burn wood logs, their central heating works off a boiler heated by logs, they have plenty of them available cheaply, and can afford to heat their homes to +25C,their houses are well insulated too, so they roam around in their tee shirts and shorts, they do not want to wear extra layers and cover whole their body in winter wear, like we all do here in UK, point was they are not used to wearing thick layers in winter indoors, but we all have a responsibility to our climate change and we can all compromise and not be wasteful with unnecessary heating that does not come cheap.

Some of us were letting property 50 or so years ago when rent controls were in place. Landlords had left the market in droves and only the brave let property. When I advertised in the local paper I would get queues down the street waiting to view.
Free markets correct supply and demand . Affordability and availability control rents.
Responsible landlords protect the good tenants but have to weather the inflationary costs like everyone else.

Reply to the comment left by peter vallance at 13/03/2022 - 10:32
Yes, I was one of those LL's 50 years ago. It was a risky time where one advert brought in 30 or 40 applicants, so you had a choice but rents were fair.
You think it's bad now? If the left gets voted in, we'll defo be returned to those days.

Reply to the comment left by peter vallance at 13/03/2022 - 10:32
Great words Peter. Those of us that stay in the business remember the past. MP's & Councillors come & go & have no clue.
US Benefit Landlords remember 2008 & LHA direct payment which made it tough for Benefit tenants & the relaxation that followed few years later then the homeless staff were telling the Benefit staff to pay the ruddy Landlord if he asked as their queues were getting longer.
And then UC repeats the process only 5 10 14 years later. It was only 2008 Gees. I'm not that ruddy old.

Those that cannot remember the past are condemned to repeat it.

Reply to the comment left by Ian Simpson at 12/03/2022 - 07:35
Interesting comments Ian re re-investing sale proceeds into Whiskey barrels. I am at the end of the process of selling one of my HMOs and struggle with where to reinvest in this overheated property market. I would be interested if you could share any information that you have on Whiskey investing, or something similar. Thanks.